PRESS RELEASE: REGULATED INFORMATION
BIOCARTIS ANNOUNCES H1 2020 RESULTS
Commenting on the H1 2020 results, Herman Verrelst, Chief Executive Officer of
KEY MESSAGES
- Commercial cartridge volume:
- Nearly 80k cartridges sold in H1 2020, a year-over-year increase of 12%, despite the COVID-19 pandemic;
- After a strong 68% year-over-year growth in Q1 2020, Q2 2020 volumes came in 20% lower than last year;
Europe : Strong continued growth in Q1 2020 and recovery by the end of Q2 2020, offsetting the impact of the pandemic in early Q2 2020;- US: Strong volume growth in Q1 2020, but recovery in Q2 2020 less pronounced, as COVID-19 cases remain high in many States. Prolonged impact of the pandemic expected into H2 2020;
- RoW: After a strong Q1 2020, RoW volumes were most impacted with limited visibility on recovery.
- Installed base:
- 101 new Idylla™ instruments placed versus 156 in H1 2019;
- Total installed base of 1,411 end H1 2020;
- 50% of the new placements in
Europe . Pace of new placements in the US and RoW slowed down due to highly restricted access to customers.
- New Idylla™ pandemic response test menu in H2 2020:
- Submission of the Idylla™ SARS-CoV-2 Test for Emergency Use Authorization (‘EUA’) with the
US FDA ; - Commercialization rights in
Europe and RoW for the CE-marked IVD test SeptiCyte® RAPID2 on Idylla™ fromImmunexpress Pty Ltd 3 ('Immunexpress' ).
- Submission of the Idylla™ SARS-CoV-2 Test for Emergency Use Authorization (‘EUA’) with the
- Expanded oncology partnerships:
- Partnership with AstraZeneca expanded with a study on liquid biopsy testing using the Idylla™ ctEGFR Mutation Assay (RUO4);
- New project with Bristol Myers Squibb Company (BMS) aimed at pursuing the registration of the Idylla™ MSI Test as a companion diagnostic5 (CDx) test in metastatic colorectal cancer (mCRC) in
China .
- Financials:
- Total operating income of
EUR 17.6m (H1 2019:EUR 17.3m ), includingEUR 11.4m product income (H1 2019:EUR 10.0m ); - Cash and cash equivalents of
EUR 150m as per end H1 2020.
- Total operating income of
COVID-19 impact and 2020 outlook
Despite the lingering impact of the pandemic, particularly in the US and the RoW, we expect continued cartridge volume growth with strong demand for the Idylla™ SARS-CoV-2 Test, offsetting a temporary slowdown in the Idylla™ core oncology business. Furthermore, the unique combined offering of the Idylla™ SARS-CoV-2 Test and the SeptiCyte® RAPID (CE-IVD) test on Idylla™ should fuel additional demand for Idylla™ instruments in the hospital intensive care units6 (ICUs). Provided that (a) normal business activities will resume in the course of H2 2020 and no new widespread lock-down measures will be imposed, and (b) the Idylla™ SARS-CoV-2 Test is granted US FDA Emergency Use Authorization (‘EUA’),
- Targeting a year-over-year commercial cartridge volume growth in the range of 30%, representing a volume of Idylla™ cartridges in the range of 228k;
- Targeting an installed base growth in the range of 300-350 new instrument placements; and
- Targeting a cash position in the range of
EUR 110m by year-end 2020.
Commercial highlights
- Global – In H1 2020, despite the COVID-19 pandemic, the commercial cartridge volume amounted to nearly 80k cartridges, a year-over-year increase of 12%. After a strong Q1 2020, commercial cartridge volumes in Q2 2020 were 20% lower than last year as a direct consequence of the pandemic, which also limited new Idylla™ instrument placements to 101 in H1 2020.
Europe – Cartridge volumes continued to grow inEurope that also accounted for half of the new Idylla™ instruments placements. The negative impact of the pandemic was most notable at the start of Q2 2020, but the strength of the European customer base lead to swift recovery with volumes and growth now tracking to initial pre-pandemic expectations. Slower than expected cartridge growth in the more affected Southern European countries was offset by robust demand in the rest ofEurope . The recent resurgence of COVID-19 cases acrossEurope may slow down the growth in H2 2020.- US – Cartridge volume growth was strong in the US in Q1 2020, but the recovery in Q2 2020 was less pronounced than in
Europe as many States are still battling with a high number of COVID-19 cases. Furthermore, COVID-19 measures did not allow new customer prospection to labs, which stalled the growth of both Idylla™ installed base expansion and commercial cartridge volume in these markets. The pandemic is expected to have a prolonged effect into the second half of 2020. - RoW – RoW cartridge growth was most impacted, with a COVID-19 peak that is still not reached in many regions.
Latin America was particularly affected. Nevertheless, new market authorizations were obtained for the Idylla™ MSI Test inColombia ,Canada ,Malaysia andSingapore , and for the Idylla™ EGFR Mutation Test inArgentina . Japan – Continued progress in the in vitro diagnostic (‘IVD’) registration preparations for the Idylla™ assays are paving the way to commercialization with Nichirei Biosciences inJapan , with first test registrations to be expected earliest by end 2021.China – InChina , the joint venture (‘China JV’) with Guangzhou Wondfo Biotech Co., Ltd7 took further steps towards establishing local manufacturing capabilities. Concerning the registration of products, a first CDx partnership was announced on5 March 2020 with Bristol Myers Squibb Company (BMS), aimed at pursuing the registration inChina of the Idylla™ MSI Test as a companion diagnostic (CDx) test in metastatic colorectal cancer8 (mCRC) (see below). First product registrations inChina to be expected earliest by end 2021.
Menu and partnership highlights
- Partnership AstraZeneca – On
22 January 2020 ,Biocartis announced that it entered into a master collaboration agreement with AstraZeneca, a global science-led biopharmaceutical company (LON/STO/NYSE: AZN), to enable collaborative development and commercialization projects betweenBiocartis and AstraZeneca, such as but not limited to, CDx development projects that may cover any type of indication or biomarker. The first project in that context is a study focused on evaluating if liquid biopsy testing using the Idylla™ ctEGFR Mutation Assay (RUO) could provide further benefits to tissue-based EGFR molecular testing. New BMS Immuno-Oncology MSI Project inChina – On5 March 2020 ,Biocartis announced a new project under its existing collaboration with Bristol-Myers Squibb Company (NYSE: BMY), a global biopharmaceutical company. While the existing collaboration is aimed at the registration in the US of the Idylla™ MSI Test as a CDx test in metastatic colorectal cancer (mCRC), under the new project, both partners will now also pursue the registration of the Idylla™ MSI test as a CDx test in mCRC9 in the People’sRepublic of China .- Expansion
Immunexpress partnership – On26 March 2020 ,Biocartis announced the co-commercialization agreement with its partnerImmunexpress of the newly CE-marked IVD SeptiCyte® RAPID10 test on Idylla™, in whichBiocartis will lead commercialization inEurope as exclusive distributor of the SeptiCyte® RAPID test, whileImmunexpress will lead commercialization in the US. On16 June 2020 ,Immunexpress announced to have been awarded a grant from theBiomedical Advanced Research and Development Authority 11 (‘BARDA’)12 for the SeptiCyte® RAPID13 test on Idylla™. - Partnership Exact Sciences – COVID-19 led to the suspension of the Idylla™ IVD Oncotype DX Breast Recurrence Score® test project. Consequently, the project plan is under evaluation and timing is under review. No launch is to be expected in 2020.
- Idylla™ publications, abstracts & posters – During H1 2020, 20 new Idylla™ publications, abstracts and posters14 were issued, all demonstrating strong data of Idylla™ tests. The studies included, amongst others, a new US multicenter study15 published in the ‘American Journal of Clinical Pathology’ which showed that, compared to current standard-of-care testing methods, the Idylla™ platform can substantially improve turnaround time of the results of mutation testing, independent of the size of the laboratory. The study is one of the largest studies performed involving Idylla™, with 20 laboratories of different types and sizes included throughout the US and
Puerto Rico , and data from almost 800 colorectal cancer samples. Furthermore, during the virtual annual ASCO16, five Idylla™ abstracts and posters17 were published by key oncology opinion leaders, including first Idylla™ data fromChina where amongst others the Idylla™ EGFR Mutation Assay (RUO) showed excellent concordance with other methods.
Organizational and operational highlights
- Appointment new CFO – On
23 April 2020 ,Biocartis announced the appointment ofJean-Marc Roelandt as the new CFO of the Company with immediate effect.Jean-Marc Roelandt is a senior executive with an established track record of more than 25 years as CFO in globally active publicly listed companies. With a focus on M&A, capital market transactions and the implementation of adequate financial management infrastructure in dynamic and fast growing companies, he built up a solid expertise in various industries. Prior to joiningBiocartis , he was CFO of MDxHealth, a healthcare company that provides actionable genomic information to personalize the diagnosis and treatment of cancer. - Progress on ML2 – Further progress was made on the transfer of Idylla™ assays to the second cartridge manufacturing line (‘ML2’). After the transfer of the Idylla™ KRAS Mutation Test (CE-IVD), during H1 2020, the Idylla™ NRAS Mutation Test (CE-IVD) and the Idylla™ MSI Test (CE-IVD) were successfully transferred to ML2. The transfer of the EGFR Mutation Test (CE-IVD) is ongoing. The Idylla™ SARS-CoV-2 Test will initially be manufactured on the first manufacturing line ‘ML1’, but the transfer to ML2 is planned towards end 2020.
Post-period events
The following events took place since
- US FDA EUA submission Idylla™ SARS-CoV-2 Test – On
10 August 2020 ,Biocartis notifiedUS FDA of the intent to commercialize the Idylla™ SARS-CoV-2 Test and applied for Emergency Use Authorization (‘EUA’). The test is intended to detect SARS-CoV-2, the virus that causes COVID-19, from nasopharyngeal swabs in viral transport medium. The Idylla™ SARS-CoV-2 Test is targeted to help healthcare providers manage the COVID-19 pandemic through rapid and easy testing of individuals with flu-like symptoms. In addition, the Idylla™ SARS-CoV-2 Test may be used in combination with the recently CE-marked IVD SeptiCyte® RAPID18 test on Idylla™ to facilitate management of patients within the hospital intensive care unit (ICU). When used together, this combined testing solution on Idylla™ has the unique potential to identify patients with severe disease, as recent data19 indicate that sepsis is the most frequently observed complication in COVID-1920. TheUS FDA regulatory process of the SeptiCyte® RAPID test on Idylla™ is ongoing. The development and roll-out of the Idylla™ SARS-CoV-2 Test is supported by multiple undisclosed partners as part of a joint commitment to respond to the COVID-19 pandemic. Mobilizing resources for the development of the Idylla™ SARS-CoV-2 Test required certain other projects to be delayed, as described in the menu outlook below. ‘Emergency Use Authorization’ (US) and CE-marking (Europe ) of the Idylla™ SARS-CoV-2 Test is pending. - Expansion collaboration
LifeArc – On1 September 2020 ,Biocartis announced the expansion of its collaboration withLifeArc , aUK based independent medical research charity. The new licence and development agreement is an extension of the existing partnership21 betweenLifeArc andBiocartis . Under the new agreement,LifeArc obtains a non-exclusive licence to use the Idylla™ platform for the development of Idylla™ assays in the area of infectious and immune related diseases, aimed at supporting patient stratification and treatment monitoring of patients with, amongst others, bacterial, fungal and viral infections.
Financial highlights
- Total operating income – Total operating income amounted to
EUR 17.6m compared toEUR 17.3m last year. Product revenues increased 14% fromEUR 10m in H1 2019 toEUR 11.4m in H1 2020. Within product sales, cartridge sales revenues increased 28% on the back of 12% higher volumes and an increasing average selling price. Idylla™ instrument sales revenues decreased by 26% as new placements were hampered by the global COVID-19 measures. Following delays of several partner projects, collaboration revenues ofEUR 4.7m decreased byEUR 2.1m year-on-year. H1 2019 also included a licensing fee ofEUR 2.5m . - Gross profit – The cost of goods sold increased from
EUR 8.7m toEUR 9.2m , but the gross margin on product sales improved from 12% to 19% as increased cartridge volumes lowered the manufacturing cost per cartridge. - OPEX – Total operating expenses (including cost of sales) of
EUR 44m remained level with last year. - Net cash flow and cash position – The net cash outflow from operating and investing activities amounted to
EUR 25.6m in H1 2020 compared toEUR 33.6m in H1 2019. The reduced outflow is attributable to a lower investment in net working capital and lower capital expenditure resulting from a lower number of Idylla™ instruments placed under reagent rental agreements. The cash and cash equivalents at30 June 2020 amounted toEUR 150m .
Key figures for H1 2020
The tables below show an overview of the key figures and a breakdown of operating income for H1 2020 and H1 2019. Consolidated financial statements and accompanying notes are included in Biocartis’ half-year 2020 report that is available here on the Company’s website.
Key figures ( | H1 2020 | H1 2019 | % Change |
Total operating income | 17,606 | 17,298 | 2% |
Cost of sales | -9,233 | -8,742 | 6% |
Research and development expenses | -20,303 | -20,031 | 1% |
Sales and marketing expenses | -7,931 | -8,811 | -10% |
General and administrative expenses | -6,491 | -6,399 | 1% |
Operating expenses | -43,958 | -43,983 | 0% |
Operating result | -26,352 | -26,685 | -1% |
Net financial result | -5,129 | -2,822 | 82% |
Share in the result of associated companies | -195 | -181 | 8% |
Income tax | 118 | 18 | 556% |
Net result | -31,558 | -29,670 | 6% |
Cash flow from operating activities | -24,526 | -28,357 | -14% |
Cash flow from investing activities | -1,028 | -5,267 | -80% |
Cash flow from financing activities | -3,456 | 179,465 | -102% |
Net cash flow 1 | -29,010 | 145,841 | -120% |
Cash and cash equivalents2 | 149,674 | 209,200 | -28% |
Financial debt | 165,258 | 166,578 | -1% |
1 Excludes the effect of exchange rate differences on the cash balances held in foreign currencies
2 Including
Operating income ( | H1 2020 | H1 2019 | % Change |
Collaboration revenue | 4,746 | 6,816 | -30% |
Idylla™ system sales | 1,837 | 2,499 | -26% |
Idylla™ cartridge sales | 9,584 | 7,481 | 28% |
Product sales revenue | 11,421 | 9,980 | 14% |
Service revenue | 530 | 351 | 51% |
Total revenue | 16,697 | 17,147 | -3% |
Grants and other income | 909 | 151 | 502% |
Total operating income | 17,606 | 17,298 | 2% |
Product sales revenue ( | H1 2020 | H1 2019 | % Change |
Commercial revenue | 10,491 | 9,551 | 10% |
Research & development revenue | 930 | 429 | 117% |
Total product sales revenue | 11,421 | 9,980 | 14% |
Outlook
- Commercial cartridge volume: Targeting a year-over-year commercial volume growth in the range of 30%, representing a volume of Idylla™ cartridges in the range of 228k.
- Idylla™ installed base: Targeting an installed base growth in the range of 300-350 new Idylla™ instruments placements.
- Idylla™ test menu outlook: COVID-19 impacted and delayed various partner projects. Furthermore, mobilizing resources for the development of the Idylla™ SARS-CoV-2 Test affected the planning of certain other projects. The revised test menu outlook is now as follows:
- ONCOLOGY MENU:
* Colorectal cancer menu – Subject to further feedback fromUS FDA interaction,US FDA 510(k) submission of the Idylla™ MSI Test is expected in Q4 2020 andUS FDA submission of PMA (Pre-Market Approval) application for the Idylla™ RAS tests is now expected in H1 2021 (instead of end 2020 initially);
* Lung cancer menu – Minor delay of the RUO launch of the Idylla™ GeneFusion Assay to Q1 2021 (instead of end 2020 initially);
* Breast cancer menu – The plan for the Idylla™ IVD Oncotype DX Breast Recurrence Score® test is under evaluation and timing is under review. No launch to be expected in 2020.
- ONCOLOGY MENU:
o INFECTIOUS DISEASE PARTNER MENU:
* The CE-IVD market release of the SeptiCyte® RAPID test on Idylla™ is expected in Q3 2020 and the
* Emergency Use Authorization ('EUA’) (US) and CE-marking (
Financial calendar 2020
- 12 November 2020 Q3 2020 Business Update
- 12 November 2020 Capital Markets Day 2020 (virtual or physical event, depending on Belgian COVID-19 guidelines)
- 25 February 2021 2020 full year results
- 1 April 2021 Publication 2020 annual report
Auditor Statement
The condensed consolidated financial statements for the six-months’ period ended
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More information:
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e-mail rdegrave@biocartis.com
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mobile +32 471 53 60 64
About Biocartis
Forward-looking statements
Certain statements, beliefs and opinions in this press release are forward-looking, which reflect the Company's or, as appropriate, the Company directors' or managements' current expectations and projections concerning future events such as the Company's results of operations, financial condition, liquidity, performance, prospects, growth, strategies and the industry in which the Company operates. By their nature, forward-looking statements involve a number of risks, uncertainties, assumptions and other factors that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties, assumptions and factors could adversely affect the outcome and financial effects of the plans and events described herein. A multitude of factors including, but not limited to, changes in demand, competition and technology, can cause actual events, performance or results to differ significantly from any anticipated development. Forward-looking statements contained in this press release regarding past trends or activities are not guarantees of future performance and should not be taken as a representation that such trends or activities will continue in the future. In addition, even if actual results or developments are consistent with the forward-looking statements contained in this press release, those results or developments may not be indicative of results or developments in future periods. No representations and warranties are made as to the accuracy or fairness of such forward-looking statements. As a result, the Company expressly disclaims any obligation or undertaking to release any updates or revisions to any forward-looking statements in this press release as a result of any change in expectations or any change in events, conditions, assumptions or circumstances on which these forward-looking statements are based, except if specifically required to do so by law or regulation. Neither the Company nor its advisers or representatives nor any of its subsidiary undertakings or any such person's officers or employees guarantees that the assumptions underlying such forward-looking statements are free from errors nor does either accept any responsibility for the future accuracy of the forward-looking statements contained in this press release or the actual occurrence of the forecasted developments. You should not place undue reliance on forward-looking statements, which speak only as of the date of this press release.
1 RoW = Rest of the World. RoW is defined as the world excluding European direct markets, US,
2 Developed in collaboration with
3
4 RUO = Research Use Only, not for use in diagnostic procedures
5 An IVD companion diagnostic device is an in vitro diagnostic device that provides information that is essential for the safe and effective use of a corresponding therapeutic product. Source:
6 The Idylla™ SARS-CoV-2 Test and the SeptiCyte® RAPID (CE-IVD) test on Idylla™ are intended for use in microbiology labs
7 Wondfo’, SHE: 300482, a fast growing diagnostics leader in
8 More info on https://investors.biocartis.com/sites/default/files/press-releases/2020/200304_pr_bms_china_eng_final.pdf
9 mCRC = metastatic colorectal cancer
10 The SeptiCyte® RAPID test is a rapid, host-response test that distinguishes sepsis from non-infectious SIRS (systemic inflammatory response syndrome) and is expected to provide actionable results in about one hour. Host-response based tests focus on measuring biomarkers that are indicative of the response of a patient’s immune system to an infection rather than measuring pathogens that are the cause of the infection. Moreover, the SeptiCyte® RAPID test not only discriminates sepsis from SIRS but also correlates with viral sepsis infection, versus procalcitonin (PCT) which increases with severity of bacterial but not viral infection and is also a non-specific marker of inflammation
11 Part of the
12 More info here
13 The SeptiCyte® RAPID test is a rapid, host-response test that distinguishes sepsis from non-infectious SIRS (systemic inflammatory response syndrome) and is expected to provide actionable results in about one hour. Host-response based tests focus on measuring biomarkers that are indicative of the response of a patient’s immune system to an infection rather than measuring pathogens that are the cause of the infection. Moreover, the SeptiCyte® RAPID test not only discriminates sepsis from SIRS but also correlates with viral sepsis infection, versus procalcitonin (PCT) which increases with severity of bacterial but not viral infection and is also a non-specific marker of inflammation
14 Including e-publications ahead of print. Sources: (1) Merlin MS et al. Rapid fully-automated assay for routine molecular diagnosis of BRAF mutations for personalized therapy of low grade gliomas. Pediatr Hematol Oncol. 2020 Feb;37(1):29-40; (2) De Luca C et al. Rapid On-site Molecular Evaluation in thyroid cytopathology: A same-day cytological and molecular diagnosis. Diagn Cytopathol. 2020 Apr;48(4):300-30. Epub 2020
15 Led by researchers from Dartmouth’s and Dartmouth-Hitchcock’s
16
17
18 Developed in collaboration with
19 Zhou et al., Clinical course and risk factors for mortality of adult inpatients with COVID-19 in
20 Sepsis developed at a median of 9 days (7–13) after illness onset among all patients, followed by ARDS (12 days [8–15]), acute cardiac injury (15 days [10–17]), acute kidney injury (15 days [13–19.5]), and secondary infection (17 days [13–9])
21 In
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